EUR/USD Mid-Session Technical Analysis for August 14, 2017

The EUR/USD is trading lower shortly before the U.S. opening. The Forex pair is trading inside Friday’s range which indicates investor indecision and impending volatility.

Technical Analysis

The main trend is up according to the daily swing chart, however, momentum is trending lower. A trade through 1.1910 will signal a resumption of the uptrend. A trade through 1.1689 will turn the main trend to down.

The short-term range is 1.1910 to 1.1689. Its retracement zone is 1.1800 to 1.1826. The EUR/USD is currently straddling this zone. Trader reaction to this area is likely to determine the near-term direction of the market.

The retracement zone is very important to the structure of the market because it could lead to the formation of a secondary lower top. This would be a sign that the selling is starting to overcome the buying.

Forecast

Based on the current price at 1.1798 and the earlier price action, the direction of the EUR/USD the rest of the session is likely to be determined by trader reaction to the 50% level at 1.1800.

A sustained move under 1.1800 will signal the presence of sellers. The daily chart is open to the downside so we could see an acceleration into the price cluster at 1.1750 to 1.1749.

The upside is a little crowded. A sustained move over 1.1800 will indicate the presence of buyers but resistance is layered at 1.1809, 1.1826 and 1.1830.

Overtaking 1.1847 will likely lead to a test of the downtrending angle at 1.1870. This is followed by a pair of uptrending angles at 1.1873 and 1.1899, followed by the main top at 1.1910.

The EUR/USD looks like it’s getting ready to roll over to the downside. Look for selling pressure to increase as long as the Forex pair remains under the retracement zone at 1.1800 to 1.1826. This would confirm the formation of the potentially bearish secondary lower top.